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GBP/USD – 1H.
According to the hourly chart, the quotes of the GBP/USD pair rebounded from the upper limit of the upward trend corridor yesterday, a reversal in favor of the US currency and began the process of falling. Already tonight, they reached the corrective level of 61.8% (1.3820), below which a close can be made in the next hour, which will increase the likelihood of a further fall in the direction of the lower border of the ascending corridor. The US currency is again in demand, however, the overall trend for the pound/dollar pair remains "bullish". Thus, before the closing of quotes under the trend corridor, there is a greater probability of continuing the growth of quotes. Today, the key event of the day is the publication of the Fed minutes. Let me remind you that at the last meeting, Jerome Powell and the company did not give any signals about the imminent end of the QE stimulus program or a rate increase. Although the US economy is recovering objectively faster than anyone else in the world, Jerome Powell is not yet ready to start winding down the quantitative stimulus program. The Fed Chairman has repeatedly noted that there will be no tightening of monetary policy until the economy fully recovers. According to Powell, inflation is still too low, and the unemployment rate is far from pre-crisis levels. Thus, the economy still needs incentives to maintain the current pace of recovery. However, traders still believe that monetary policy may become more hawkish in the near future. So far, we are talking at least about reducing the monthly repurchase of government and corporate bonds from the open market. But whether the FOMC itself is thinking in this direction, we will find out from the evening protocol. Any "hawkish" notes can help the US dollar to strengthen.
GBP/USD – 4H.
On the 4-hour chart, the GBP/USD pair closed under the corrective level of 23.6% (1.3870), however, the ascending trend line retains the "bullish" mood among most traders. Thus, the rebound from the trend line may work again in favor of the British dollar and the resumption of growth in the direction of the level of 1.4003. The closing of the pair's rate under the trend line will allow traders to count on the continuation of the fall of quotes in the direction of the corrective level of 38.2% (1.3643).
GBP/USD – Daily.
On the daily chart, the pair's quotes still performed a rebound from the ascending trend line. Thus, in the long term, the "bullish" mood of traders remains, however, the bears may make a new attempt to close under the trend line at any time.
GBP/USD – Weekly.
On the weekly chart, the pound/dollar pair completed a close over the second downward trend line. Thus, the chances of long-term growth of the pound remain.
Overview of fundamentals:
There were no major events or economic reports in the UK and US on Tuesday. The information background was completely absent.
News calendar for the United States and the United Kingdom:
UK - PMI index for the service sector (08:30 UTC).
US - publication of the minutes of the Fed meeting (18:00 UTC).
On Wednesday, the calendars of economic events in the UK and the US contain one entry each, however, the FOMC protocol is of the greatest interest.
COT (Commitments of Traders) report:
The latest COT report from March 30 on the British pound showed a newly discovered reluctance of major players to deal with the pound. The "Non-commercial" category of traders closed 4,719 long contracts and 6,829 short contracts during the reporting week. If you look closely at the data from the table, it becomes clear that throughout March, speculators actively closed long contracts. Thus, if the report for February 23 showed a two-fold difference between the total number of long and short contracts for speculators, now the numbers have decreased, and the two-fold difference remains. Thus, the "bullish" mood remains, and the pound sterling actively shows a desire to start new growth.
GBP/USD forecast and recommendations for traders:
It is recommended to buy the British dollar when rebounding from the level of 1.3820 on the hourly chart or the lower border of the ascending corridor with the goal of the level of 1.3900. I recommend selling the pound sterling when closing quotes under the ascending corridor on the hourly chart or under the trend line on the 4-hour chart with targets of 1.3721 and 1.3634.
Terms:
"Non-commercial" - major market players: banks, hedge funds, investment funds, private, large investors.
"Commercial" - commercial enterprises, firms, banks, corporations, companies that buy foreign currency, not for speculative profit, but to support current activities or export-import operations.
"Non-reportable positions" - small traders who do not have a significant impact on the price.
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